The Cable

From Electricity to Sewage, U.S. Intelligence Says the Islamic State Is Fast Learning How to Run a Country

The Obama administration's escalating air war against the Islamic State is running up against a dispiriting new reality: The militants are becoming as good at governing territory as they are at conquering it, making it considerably harder to dislodge them from the broad swaths of Syria and Iraq that they now control.

U.S. intelligence officials say the leaders of the Islamic State are adopting methods first pioneered by Hezbollah, the Lebanon-based Shiite militia, and are devoting considerable human and financial resources toward keeping essential services like electricity, water, and sewage functioning in their territory. In some areas, they even operate post offices.

The militants have built new court systems to enforce their harsh interpretation of sharia law, which punishes thieves by amputating their hands and has sentenced numerous Christians and other religious minorities to death because of their beliefs, the officials added.

At the same time, the Islamic State has generally allowed the local bureaucrats in charge of hospitals, law enforcement, trash pickup, and other municipal services to stay in their jobs, according to intelligence officials. In some areas, sitting mayors and other top local officeholders are keeping their posts.

Taken together, the moves highlight the fact that the Islamic State, already the best-armed and best-funded terror group in the world, is quickly adapting to the challenges of ruling and governing. That, in turn, dramatically reduces the chances that the extremists will face homegrown opposition in what amounts to the world's newest territory.

"ISIS is the most dangerous terrorist group in the world because they combine the fighting capabilities of al Qaeda with the administrative capabilities of Hezbollah," said David Kilcullen, a counterinsurgency expert who spent several years working as a top aide to Gen. David Petraeus during the height of the Iraq War. "It's clear that they have a state-building agenda and an understanding of the importance of effective governance."

In some areas under their control, the Islamic State is opening hospitals, building new roads, launching bus services, rehabilitating schools (at least for boys), and launching small-business programs designed to juice the local economies. In Syria, where bread is a core staple, the militants focus on managing local wheat mills and bakeries to ensure that supplies remain high enough to feed a population that was in some areas on the edge of starvation.

The group's focus on good governance, at least by militant standards, starts at the top. In his first public comments after conquering Mosul, the Islamic State's self-proclaimed caliph, Abu Bakr al-Baghdadi, called on "scientists, scholars, preachers, judges, doctors, engineers and people with military and administrative expertise" to help govern the land his group controls. Those weren't just words: Shortly after taking control of Mosul, Baghdadi transferred the Islamic State's hospital administrator for the Syrian city of Raqqa to Mosul to take that same job there, Kilcullen said.

In Raqqa, which has been under Islamic State control for months, traffic police remain on the streets and local citizens pay taxes to the militants, who in turn give them receipts stamped with the group's logo. A local goldsmith told the New York Times that the taxes are far cheaper than the bribes residents had to pay when Syrian strongman Bashar al-Assad was in control. "I feel like I am dealing with a respected state, not thugs," the goldsmith said.

The Islamic State also launched a "hearts-and-minds" campaign of sorts. In one of the more jarring examples, the group held a "fun day" in Mosul where the militants passed out soccer balls and held Quran memorization and recitation contests. The Islamic State, Kilcullen said, "is thinking like a state."

REUTERS/Stringer

The Cable

Spies Like Us: Germany Spies on Allies, Too

The revelation that Germany spies on Turkey, a NATO member, should dispel any notion that spying on allies violates the unwritten rules of international espionage, despite Berlin's numerous suggestions otherwise.

For nearly a year, the extent of NSA surveillance on German leaders, including Chancellor Angela Merkel, has drawn stern rebuke from the German political and media establishment. Merkel and other German politicians never miss an opportunity to criticize the United States. Merkel went so far as to publicly oust the CIA station chief in Berlin.

"Spying among friends is not at all acceptable," Merkel said in October, a claim she has repeated numerous times, most recently last month.

However, Germany's sanctimony toward "friendly" espionage is now a huge embarrassment for Merkel. Over the weekend, Der Spiegel reported that the BND, Germany's foreign intelligence collection agency, was spying on Turkey. It also reported, based on anonymous sources, that calls made by Secretary of State John Kerry and former Secretary of State Hillary Clinton were accidentally recorded. According to Der Spiegel, the calls targeting American leaders were immediately destroyed.

Tensions between Germany and Turkey are nothing new. Berlin has long opposed Turkey's bid to join the European Union. A recent poll found that 69 percent of Germans oppose allowing Turkey into the EU, up from 52 percent in 2005. In 2012, Germany also dragged its feet in supplying Turkey with missiles to secure its border with Syria, despite Turkey's formal request through NATO.

The German government has yet to address the allegations. But Turkey's Foreign Ministry said that if the allegations are true, they are "totally unacceptable." Turkey also summoned German Ambassador Eberhard Pohl on Monday, demanding an explanation.

"It is expected that the German authorities present an official and satisfactory explanation on the claims reported by German media and end these activities immediately if the claims are true," the ministry said in a statement.

Lindsay Moran, a former CIA clandestine service officer, doesn't believe that the German spying on American officials was an accident.

"I find the notion that [Clinton and Kerry] were accidentally overheard preposterous," she said, adding: "It's a kind of delightful revelation given the fact that the Germans have been on their high horse."

Christian Whiton, a former Bush administration State Department senior advisor, added that the report on German spying is a perfect example of why rifts over intelligence among allies should be handled quietly and privately.

"Governments -- especially allies -- ought to handle espionage claims with a simple refusal to comment. That used to be the practice," Whiton said. "Otherwise, they risk looking sanctimonious or hypocritical, as Berlin now does."

Merkel is now in a tough spot. The BND's collection of intelligence from Turkey is necessary; Germany has a large Turkish immigrant population and has arrested some on terrorism charges.

"Any responsible government collects as much foreign intelligence as possible," Whiton said.

Now, Berlin's ability to do so is compromised.

Daniel Kurtzer, who formerly served as the U.S. ambassador to Israel and to Egypt, said that Berlin isn't likely to buy into the argument that spying on Turkey justifies the NSA targeting Merkel. "It's still a problem that needs to be solved between the two," Kurtzer said.

But Moran, the former CIA officer, said that American diplomats finally have ammunition to respond, especially after the CIA station chief was booted out of Germany.

"It was kind of unprecedented and done to embarrass us," Moran said of the ouster. "The Germans will take an evasive stance [on their espionage activities] but now they're in no position to criticize."

ODD ANDERSEN